Apparently, the office market has not recovered completely.

[TerryRohrer]

That is a haircut!

"A joint venture of Chicago-based Glenstar and Minnesota-based investor Patrick Halloran last week acquired the 46-story office tower at 500 W. Monroe St., the duo announced. The sale price for the 966,924-square-foot building was not disclosed, but sources familiar with the transaction said the buyers paid just less than $100 million for the distressed $270 million loan backed by the building and seized the property through a deed in lieu of foreclosure.

The price was a fraction of the $412 million that a venture of San Francisco-based Spear Street Capital paid for the tower in October 2019, just months before the public health crisis upended the business of owning workspace. The loss to Spear Street and lender JPMorgan Chase is among the most dramatic examples of financial devastation in a downtown office market beset by record-high vacancy, severely weakened demand and elevated interest rates, among other headwinds."

Distressed West Loop office skyscraper sold at historic discount

The sale represents one of the most staggering losses of value ever for a downtown office building.

www.chicagobusiness.com

 

[Mark K]

Its just the start.

Seattle and San Francisco vacancy rates are higher than Chicago.

 

[DTB]

And if anyone thinks conversion to apartments is a thing... 29 S. LaSalle St.

211 unit conversion foreclosed on a $74,000,000 construction loan.

50% haircut anyone?

https://www.costar.com/article/553132141/whats-a-downtown-office-to-apartments-conversion-worth-this-chicago-deal-could-provide-an-answer

 

[Joe Flacco]

What's amazing to me is that the banks are pretty much unscathed. All of the damage is in the REITS and it looks like all of the losses are pretty much priced in.

 

[jay trotta]

That is a haircut!

"A joint venture of Chicago-based Glenstar and Minnesota-based investor Patrick Halloran last week acquired the 46-story office tower at 500 W. Monroe St., the duo announced. The sale price for the 966,924-square-foot building was not disclosed, but sources familiar with the transaction said the buyers paid just less than $100 million for the distressed $270 million loan backed by the building and seized the property through a deed in lieu of foreclosure.

The price was a fraction of the $412 million that a venture of San Francisco-based Spear Street Capital paid for the tower in October 2019, just months before the public health crisis upended the business of owning workspace. The loss to Spear Street and lender JPMorgan Chase is among the most dramatic examples of financial devastation in a downtown office market beset by record-high vacancy, severely weakened demand and elevated interest rates, among other headwinds."

Distressed West Loop office skyscraper sold at historic discount

The sale represents one of the most staggering losses of value ever for a downtown office building.

www.chicagobusiness.com

If memory serves, this sounds like the 1990's era bust out in Texas, the difference there today is they actually found a solution. Some areas adjust better I guess.